August 28, 2008
HP-1119

Treasury Targets Rising Colombian Narcotics Traffickers

Washington, DC--The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today designated two Colombian individuals, Jesus Maria Alejandro Sanchez Jimenez and Rafael Angel Sanchez Rua, as Specially Designated Narcotics Traffickers (SDNTs) pursuant to Executive Order 12978.  OFAC also designated as SDNTs two other individuals and four entities located in Colombia.  Sanchez Jimenez and Sanchez Rua are among those who have inherited the drug trafficking organization once led by SDNT principal Carlos Mario Jimenez Naranjo (alias "Macaco"), who is now in U.S. custody.

"The recent extradition of Carlos Mario Jimenez Naranjo represents a success in the U.S. and Colombian governments' efforts against narcotics trafficking.  It also demonstrates the Colombian government's commitment and leadership in this effort," said OFAC Director Adam J. Szubin.  "Today's designation exposes two of the individuals who have replaced Jimenez Naranjo, who headed one of the most powerful and ruthless criminal groups in Colombia."

Carlos Mario Jimenez Naranjo was extradited to the United States on May 7, 2008.  He faces federal drug trafficking charges, among other charges, in the U.S. District Court for the District of Columbia and the U.S. District Court for the Southern District of Florida.

Jesus Maria Alejandro Sanchez Jimenez, also known as "El Primo" and "Scubi," is from Pereira, Colombia and is a cousin of Jimenez Naranjo.  Sanchez Jimenez helped manage Jimenez Naranjo's drug trafficking operations while the latter was in a Colombian prison awaiting extradition to the United States.  Sanchez Jimenez has grown more powerful following the recent assassination in Argentina of his close associate, Hector Edilson Duque Ceballos (alias "Monoteto"), who was also a lieutenant in Jimenez Naranjo's drug trafficking organization.  Rafael Angel Sanchez Rua is from Cartago, Colombia and is a long-time drug trafficking partner of Jimenez Naranjo.  Sanchez Rua is involved in the transportation of Colombian cocaine to Europe through Venezuela.  In the late 1990s, Sanchez Rua was arrested by Colombian authorities on arms smuggling charges.  The current whereabouts of Jesus Maria Alejandro Sanchez Jimenez and Rafael Angel Sanchez Rua are unknown.

Today's OFAC action also targets entities and individuals that hold assets on behalf of Jesus Maria Alejandro Sanchez Jimenez and Rafael Angel Sanchez Rua.  Ganaderia Arizona, controlled by Sanchez Jimenez, is a prize-winning cattle farm located in Caucasia, Colombia with an office in Medellin.  Sanchez Rua controls three companies in or near Cartago, Colombia: Almacen y Compraventa Los 3 Oros, an agricultural store; Granja Porcicola La Fortaleza, a commercial pig farm; and Motel Momentos E.U., an hourly motel.  OFAC also designated today Luz Piedad Restrepo Encizo and Marisol Viedma Abonce, who act for or on behalf of Sanchez Rua.

This designation is part of the ongoing interagency effort by the Departments of the Treasury, Justice, State and Homeland Security to implement Executive Order 12978 of October 21, 1995, which applies financial sanctions against Colombia's drug cartels. Today's designation action freezes any assets the designees may have that are subject to U.S. jurisdiction and prohibits all financial and commercial transactions by any U.S. person with the designated companies and individuals.

A detailed look at the program against Colombian drug organizations is provided in OFAC's March 2007 Impact Report on Economic Sanctions Against Colombian Drug Cartels.

REPORTS

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Opening Remarks of Assistant Secretary for Terrorist Financing
Patrick O’Brien at Treasury’s Charity Roundtable

Washington DC--Good Morning.  I would like to welcome you all to the Treasury Department for today's Charity Roundtable.  It is our hope that today's discussion will build upon the regular dialogue we have had over the years both here in Washington and in community events around the country.   Before I go further, I would like to extend my special thanks to Mr. Kareem Shora, National Executive Director of the American-Arab Anti-Discrimination Committee (ADC), and his capable staff for their assistance and leadership in organizing this event.

The United States government is committed to strengthening our relationship with Arab and Muslim-American communities.  For our part, the Treasury Department continues to engage with both the charitable sector and affected communities to advance our shared interests in a free, open, tolerant, and charitable society.  One that encourages charitable and humanitarian activities, while at the same time protecting those efforts from abuse.    

Over the last several years, the Treasury Department has established an important relationship and dialogue with the Arab and Muslim-American communities as we work together to address the threat of terrorist financing in the United States and the Muslim and Arab worlds.  This relationship is necessary as we work to protect and preserve the sanctity of charitable giving and zakat from terrorist groups like al Qaida, Hamas, Hizbollah, and others who have purposely usurped the goodwill and donations of Muslims around the world to fuel their terrorist agenda.  It is also critical to advancing our collective mission of promoting charitable relief and development around the world to those most in need of our assistance.  Although we may not agree on all points, an honest and frank exchange between the federal government and Arab and Muslim-American communities fosters mutual understanding and also serves as a basis for continued cooperation.

The Arab and Muslim-American communities are uniquely situated to advance our common interests in both promoting and protecting charitable activities.  Your engagement and leadership has the potential to affect global practices and perceptions that are essential to these interests and winning the long term battle against terrorism.

We anticipate that today will provide an open and informal forum to exchange thoughts and mutual concerns.  It is fair to say that our agenda is ambitious and engaging.  There is a diversity of interests and concerns that are reflected by speakers from Treasury, the Internal Revenue Service, the FBI, USAID as well as a number of charitable and advocacy groups, civil rights organizations and concerned individuals. 

Today's dialogue will be wide-ranging and focused on the following topi

• The nature of the threat of terrorist abuse of charities;
• Basic governance, accountability, and transparency issues which affect charities as well as hearing how the private sector implements such principles;
• Concerns of charities that operate in high-risk areas and measures they may voluntarily implement to minimize risks of abuse;
• Providing guidance to donors on charitable giving;  and
• Identifying ongoing and future challenges.

I would like to make a few general observations about the first topic on the agenda – the nature of the threat.  Absent a baseline understanding of this matter, the United States and the international community's response would not be well understood.  As has been noted on many occasions, the nature of terrorist financing is dynamic, evolving, and it often varies by the particular region.  However, the Treasury Department, working with its domestic partners and international organizations such as the Financial Action Task Force, has made a concerted effort to document the risks and typologies of terrorist exploitation through a number of publications.

Some believe that the terrorist financing threat in the charitable sector is limited to cases of diversion of funds or materials.  Diversion occurs when a charity ostensibly raises money for a legitimate goal, but then uses the funds for an illicit purpose.  In the broadest sense, this is fraud.  However, it is not the only problem we confront in the sector.  In addition to raising and moving funds as well as providing operational cover, it is well known that foreign terrorist organizations such as al Qaida, Hamas, and Hizbollah purposefully establish or exploit charities to gain support, recruit new members, and radicalize vulnerable populations.  Terrorist groups often supplant a weakened central government and in effect, develop social welfare arms.  They run the hospitals, schools, and clinics for these populations.  This gives terrorist organizations a seemingly reputable foundation for recruiting new members.

Many of these charities do provide actual services, as well as support terrorism.  It is this aspect of the threat the underlines our voluntary guidance covering the vetting of key employees and grantees of charities working in high-risk areas against lists of designated terrorist organizations, entities and individuals. This fact is supported by a number of different sources including law enforcement investigations, academic studies, media reports, and publicly available information that support Treasury Department designations.  In this regard, the public information concerning Treasury's designations of specific U.S.-based charities revealed that many of the charitable organizations engaged in actual charitable services.  However, they were unfortunately owned or controlled by, or acted for or on behalf of; or provided financial, material, or technological support. This is a violation of U.S. law, namely Executive Order 13224.  Organizations such as Benevolence International Foundation and Global Relief Foundation are prime examples of this type of illicit activity.  Furthermore, Treasury's recent designation of the Tamil Rehabilitation Organization (TRO) in Sri Lanka and a similar action taken by the Government of Canada illustrates that a wide range of foreign terrorist organizations that exploit charitable services.  In fact, almost all of the foreign terrorist organizations maintained by the federal government have some charitable component or function.   

The broader exploitation of charities operating in high-risk regions raises serious questions and challenges for the United States, the international community, and charities operating in high-risk areas.  Going forward, some key challenges include: adoption of best practices, utilizing alternative relief measures, and improving private sector relief efforts.  Let me just take a minute to briefly outline these areas.  

Adoption of Anti-Terrorist Best Practices

All charities working in high-risk areas should consider adopting specific anti-terrorist measures.  As guidance, Treasury published the Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.- Based Charities in consultation with a number of charitable groups.  In light of the risk of exploitation in certain regions and the need to comply with U.S law, these measures, among other things, recommend that a charity collect information on its grantees as well as key employees and then check such information against lists maintained by the Department of the Treasury.  It is important to note that such measures are risk-sensitive and recognize that charities may sometimes operate under exigent circumstances.  However, we understand that there has been significant discussion both within the charitable sector and affected communities regarding the feasibility, potential burden, and the effect of such measures, and hope we can examine these concerns during today's roundtable.  Going forward, Treasury will continue to work with interested parties to further refine its guidance in this area, including through the Treasury Guidelines Working Group forum.

Alternative Relief  

In some circumstances, effectively and safely operating in regions where there are known terrorist activities may require creating alternative distribution means.  Essentially, this type of partnership allows individual U.S. donors to tap into the government resources and distribution networks, thereby leveraging counterterrorism mechanisms only available to the government.  The aim is straightforward – to provide a safe and effective way for individuals to contribute to critical regions where aid is desperately needed, such as the West Bank and Gaza.  Such partnerships also have the potential to weaken the hold that foreign terrorist organizations have on vulnerable populations by harnessing a competitive force – the generosity of the American people.  Dr. Ziad Asali, the American Charities for Palestine, and other government partners who work with USAID are doing just that.  It is our hope that this type of collaboration will take root and serve as a model for other areas of concern as well as encompass other funding streams including that of the international community.

Private Sector Efforts 

Of course, the first line of defense against terrorist exploitation of the charitable sector lies with charities themselves.  On its own initiative, a Muslim-American advocacy group has started to educate its constituency and bolster the capacity of member charities.  Muslim Advocates has taken an important first step by partnering with the Better Business Bureau Wise Giving Alliance to develop a training and certification program encompassing transparency, accountability, and governance related issues.  We strongly support this effort and it is our hope that this type of program will be embraced by other groups and that the original scope will be expanded to also cover terrorist financing issues and preventive measures for charities working in high-risk regions. 

Conclusion

In closing, I hope today's Charity Roundtable discussion helps us all better understand how we can work together to advance our common interests in promoting and protecting charity.  The continued dialogue and work between the federal government and Arab and Muslim-American communities is a critical element in our collective effort to combat those aiming to corrupt our charitable institutions and destroy the liberties we enjoy every day as Americans.  We look forward to continuing our work together on these issues, and I thank you for your participation, concern, and leadership in moving this dialogue forward.

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Treasury Designates Iranian Nuclear and Missile Entities

Washington, DC--The U.S. Department of the Treasury today designated five entities for their ties to Iran's nuclear and missile programs. All five designees are owned or controlled by, or acting or purporting to act for or on behalf of, entities that have been designated by the United States or the United Nations Security Council.

The entities designated today are the Nuclear Research Center for Agriculture and Medicine (a/k/a Karaj Nuclear Research Center), the Esfahan Nuclear Fuel Research and Production Center (NFRPC), Jabber Ibn Hayan, Safety Equipment Procurement Company (SEP Co.) and Joza Industrial Company.

"Responsible financial institutions and businesses worldwide are taking steps to avoid doing business with Iranian nuclear and missile entities, as well as with the front companies and cut-outs the Iranian regime uses to disguise its activities," said Stuart Levey, Under Secretary for Terrorism and Financial Intelligence.  "These five nuclear and missile entities have been used by Iran to hide its illicit conduct and further its dangerous nuclear ambitions." 

This action was taken pursuant to Executive Order 13382, which is aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters, and at isolating them from the U.S. financial and commercial systems. Designations under E.O. 13382 are implemented by Treasury's Office of Foreign Assets Control, and they prohibit all transactions between the designees and any U.S. person, and freeze any assets the designees may have under U.S. jurisdiction.

The Nuclear Research Center for Agriculture and Medicine, the NFRPC, and Jabber Ibn Hayan have been designated pursuant to E.O. 13382 because they are owned or controlled by, or acting or purporting to act for or on behalf of the Atomic Energy Organization of Iran (AEOI).

President George W. Bush in June 2005 identified the AEOI in the Annex to E.O. 13382. The AEOI, which directly reports to the Iranian President, is the main Iranian organization for research and development activities in the field of nuclear technology, including Iran's centrifuge enrichment program, and manages Iran's overall nuclear program. The AEOI was designated by the United Nations in the Annex to UN Security Council Resolution 1737 for its role in Iran's nuclear program.  

The Nuclear Research Center for Agriculture and Medicine at Karaj is a large AEOI research component. The NFRPC is AEOI's center for the development of nuclear fuel, involved in enrichment-related activities. The NFRPC's uranium conversion facility, in operation since 2005, can produce most of the uranium compounds needed for fuel cycle activities. Uranium conversion is an essential step for the creation of nuclear fuel.  Jabber Ibn Hayan, also part of AEOI, is involved in the field of research and development in the nuclear cycle, in addition to providing a wide range of laboratory services for the AEOI nuclear production division.

President Bush also identified Iran's Aerospace Industries Organization (AIO) and the Shahid Hemmat Industrial Group (SHIG) in the Annex to E.O. 13382. AIO is the overall manager of Iran's missile program and oversees all of Iran's missile industries. SHIG is responsible for Iran's ballistic missile programs, most notably the Shahab series of medium-range ballistic missiles. AIO and its subordinate elements, such as SHIG, often use front companies to access foreign technology and raw materials for the development of Iran's missile program.

SEP Co. has been designated today for acting, or purporting to act for, or on behalf of AIO. AIO has been using SEP Co. to procure on its behalf since at least 2003. Joza Industrial Company has also been designated today for acting or purporting to act for, or on behalf of, directly or indirectly, SHIG. In an effort to evade sanctions and obscure its procurement efforts, SHIG utilizes a series of front companies, including the Joza Industrial Company, to purchase goods and materials.

All five of the entities designated today have also been previously designated by the United Nations. The Nuclear Research Center for Agriculture and Medicine and the NFRPC were both designated by the United Nations in the Annex to Resolution 1747 for their involvement in Iran's nuclear activities. Jabber Ibn Hayan, Joza Industrial Company, and SEP Co. were designated by the United Nations in Annex III to Resolution 1803.

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August 5, 2008
HP-1109

Treasury Designates the Financial Network of Major Sinaloa
Cartel Operator Rigoberto Gaxiola Medina

Washington, DC--The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today named 14 companies and 17 individuals tied to drug trafficking kingpin Rigoberto Gaxiola Medina as specially designated narcotics traffickers (SDNTs).  The designees, all based in Mexico, are now subject to economic sanctions pursuant to the Foreign Narcotics Kingpin Designation Act.

Rigoberto Gaxiola Medina, currently imprisoned in Mexico, is the leader of a major drug trafficking organization responsible for transporting thousands of tons of marijuana from Mexico into the Southwestern United States.  His organization built and employed a network of underground tunnels to move drugs and cash between Mexico and the United States.  As a gate-keeper for marijuana shipments entering the United States, Gaxiola's organization functions as a vital component of the Joaquin "Chapo" Guzman Loera drug trafficking organization and the Sinaloa Cartel.

"We are sanctioning Rigoberto Gaxiola Medina's network of companies and associates to support and advance the Mexican authorities' important efforts against this criminal organization," said OFAC Director Adam J. Szubin.

The designation includes key Gaxiola associates Roque Duarte Munoz, Armando Aguirre Cardona, Juan Luis Guzman Enriquez and Juan Francisco Quintero Arce, all of whom were arrested in 2003 along with Rigoberto Gaxiola Medina by Mexican federal authorities. Another associate designated today, Sandra Lucero de Martinez, was arrested by U.S. law enforcement in 2005 and subsequently extradited to Mexico to face organized crime charges. All six individuals are currently imprisoned on a combination of convictions for organized crime and unlawful use of military-grade weapons.

Despite the 2003 arrests, Rigoberto Gaxiola Medina's financial network for laundering drug proceeds has continued to function under the leadership of his family and close business associates, including his wife, Maria Del Rosario Garcia Duran, his sons Rigoberto Gaxiola Garcia and Carlos Alberto Gaxiola Garcia, and his daughter, Maria Elena Gaxiola Garcia, all of whom are also being designated today by OFAC.  Other key associates designated by this action are Eleazar Fontes Moreno, Rafael Angel Valencia Jaime, and Ana Cristina Arce Borboa.

The financial network designated by today's action is comprised of companies in the Mexican states of Sonora, Sinaloa, and Jalisco, including: 4 mining firms, Minera Rio Presidio, S.A. De C.V., Minera La Castellana y Anexas, S.A. De C.V., Copa de Plata, S.A. De C.V. and Compania Minera Del Rio Cianury, S.A. De C.V.; a car dealership, Distribuidora Gran Auto, S.A. De C.V.; and a private gym, Bioesport, S.A. De C.V.

This action is part of ongoing efforts under the Foreign Narcotics Kingpin Designation Act to apply financial measures against significant foreign narcotics traffickers worldwide. More than 300 businesses and individuals associated with 75 drug kingpins have been designated pursuant to the Kingpin Act since June 2000.

Today's designation would not have been possible without key support from the Drug Enforcement Administration (DEA) Resident Office in Hermosillo, Sonora, Mexico; DEA's Financial Operations Division; the Department of Homeland Security's Immigration and Customs Enforcement field office in San Diego; and the U.S. Attorney's Office, District of Arizona.

Today's designation action freezes any assets the 31 designees may have under U.S. jurisdiction and prohibits U.S. persons from conducting transactions or dealings in property interests of the designated individuals and entities.  Penalties for violations of the Kingpin Act range from civil penalties of up to $1,075,000 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5,000,000. Criminal fines for corporations may reach $10,000,000. Other individuals face up to 10 years in prison for criminal violations of the Kingpin Act and fines pursuant to Title 18 of the United States Code.

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REPORTS

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July 31, 2008
HP-1096

Treasury Targets FARC Financiers and Drug-Traffickers

Washington, DC--The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today designated six companies and 13 individuals that act on behalf of and materially assist the narcotics trafficking activities of the Revolutionary Armed Forces of Colombia (FARC), a designated narco-terrorist organization. Today's designation, made pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), is OFAC's fifth action against the FARC in the past eight months.

"Today's action is the latest in a series of blows to the FARC and builds on the Colombian government's recent successes against this corrupt narco-terrorist group," said OFAC Director Adam J. Szubin. "Our designation targets the logistical and financial support network of the FARC's 1^st Front, the arm of this terrorist group responsible for holding the hostages recently rescued by the Colombian authorities."

One of the FARC individuals sanctioned today, Alexander Farfan Suarez (a.k.a. "Enrique Gafas"), was captured by Colombian authorities during the July 2, 2008 hostage rescue mission that freed three U.S. citizens--Marc Gonsalves, Thomas Howes, and Keith Stansell--who were held captive roughly five years, as well as 12 other hostages held by the FARC. Also captured was the FARC's 1^st Front commander, Gerardo Antonio Aguilar Ramirez (a.k.a. "Cesar"), who was designated by OFAC on September 28, 2006.

This OFAC sanctions investigation targets a logistical and financial support network of the FARC's 1^st Front, run by Nancy Conde Rubio (a.k.a. "Doris Adriana"). Conde Rubio, arrested by Colombian authorities in February 2008, oversaw individuals and entities that used money derived from FARC narcotics sales to procure weapons, ammunition, communications gear, medical equipment, uniforms, and airplane fuel. Conde Rubio communicated with various persons in the FARC network targeted by this action using Communicaciones Unidas de Colombia Ltda., a call center located in Villavicencio, Colombia, operated by FARC associate Ana Isabel Pena Arevalo. This FARC network laundered its drug trafficking monies through two money exchange businesses or cambistas - Cambios Euro Ltda. and La Monedita De Oro Ltda. - both located in Bogota, Colombia. Two other Bogota-based FARC front companies, Dizriver Y Cia S. En C. and Colchones Sunmoons Ltda., were also designated.

Conde Rubio and eight other individuals sanctioned by OFAC today were named in a February 2008 U.S. federal indictment in the U.S. District Court for the District of Columbia for materially assisting the FARC.

Also designated today is Jose Maria Corredor Ibague (a.k.a. "Boyaco"), considered one of the FARC's most prolific arms-for-drugs traffickers of the past few years. Josue Cuesta Leon (a.k.a. "El Viejo") and Edilma Morales Loaiza, both key arms traffickers involved in the FARC's drug trafficking activities, were also named.

OFAC's sanctions investigation of the FARC's 1^st Front would not have been possible without the support of the Federal Bureau of Investigation and the U.S. Attorney's Office for the District of Columbia.

In addition, Exchange Center Ltda., a Colombian cambista linked to the FARC's 27^th Front is being designated by OFAC today. Previously, on May 7, 2008, OFAC designated Mercurio International S.A., a Colombian money exchange house ("casa de cambio") for providing support to the FARC.

On May 29, 2003, President George W. Bush identified the FARC as a significant foreign narcotics trafficker pursuant to the Kingpin Act. Previously, in 2001, OFAC designated the FARC as a Specially Designated Global Terrorist pursuant to Executive Order 13224, and in 1997 the FARC was designated as a Foreign Terrorist Organization by the Secretary of State.

Today's action freezes any assets the designated entities and individuals may have under U.S. jurisdiction and prohibits U.S. persons from conducting financial or commercial transactions involving those assets. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,075,000 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5,000,000. Criminal fines for corporations may reach $10,000,000. Other individuals face up to 10 years in prison for criminal violations of the Kingpin Act and fines pursuant to Title 18 of the United States Code.

For a complete list of the individuals and entities designated today, please visit:
http://www.treasury.gov/offices/enforcement/ofac/actions/

To view previous OFAC actions directed against the FARC, please visit:

• Treasury Action against the FARC on May 7, 2008.

• Treasury Action against the FARC on April 22, 2008.

• Treasury Action against the FARC on January 15, 2008.

• Treasury Action against the FARC on November 1, 2007.

• Treasury Action against the FARC on September 28, 2006.

• Treasury Action against the FARC on February 19, 2004.

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REPORTS

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